The world’s leading financial regulators have concluded that nobody is to blame for Shell’s overstatement of its oil reserves, after the US Securities and Exchange Commission (SEC) dropped its investigation of Sir Philip Watts.
Sir Philip, the former executive chairman of Shell, is understood to be considering how to rebuild his reputation, including potential legal action against those who alleged wrongdoing on his part.
The SEC, America’s market regulator, has decided not to take its investigation into Sir Philip any farther, a decision that the Financial Services Authority (FSA) in Britain reached last November. Dutch authorities have also decided to take no action, even though Shell has restated its oil reserves five times since 2004.
From 1998 to 2003, Shell had been claiming oil and gas reserves as “proven” — which carries a strict SEC definition — when it should not have done. Claiming reserves as proven means that a company is all but ready to pump the oil and the oil can be booked as a hard asset.